23 slides from Prosus N.v. Class N's investor presentation, 2022
Slide 1: Quick Commerce
Quick Commerce Larry Illg | CEO Food & Edtech
Slide 2: Disclaimer
Disclaimer Important information This presentation contains forward-looking statements as defined in the United States Private Securities Litigation Reform Act of 1995 concerning our financial condition, results of operations and businesses. These forward-looking statements are subject to a number o
Slide 3: Prosus is building a global food delivery leader
Prosus is building a global food delivery leader Delivery Hero Oda 27.3% 13.2% Global NO, FI Flink Wolt 9.8% 1.73%1 DE, NL, FR, AT EU iFood Swiggy 62.7% 32.0% BR, CO India 2013 2017 2021 Source: In November 2021, DoorDash announced its acquisition of Wolt and the deal is expected to close in 2H 2022
Slide 4: Quick commerce unlocks platform potential to unlock TAM
Quick commerce unlocks platform potential to unlock TAM Appeal of Food Delivery 3.0 Ecosystems 2020s Food delivery 3.0 Applying 1P logistics to other verticals 2010s Profitability and defensibility Food delivery 2.0 • Increasing share of wallet of 1P logistics-enabled marketplace existing consumers
Slide 5: What is quick commerce?
What is quick commerce? Quick commerce today typically refers to grocery items delivered in 10-20 minutes Simple user experience 2-3k SKUs curated by category, with search functionality Stores are operated by the platform – ensuring seamless logistics and optimized delivery time / customer experienc
Slide 6: Quick commerce is much broader than convenience
Quick commerce is much broader than convenience Assortment Principles Ready to Eat Coffee, tea • Today 2,300 SKUs at supermarket prices – plan to increase up to Other Bakery 2,500 Non-alcoholic • Best-selling brands in each Household products beverages category Dairy Sauces, spices • Focus on high q
Slide 7: The traditional offline convenience market is large, growing and profitable
The traditional offline convenience market is large, growing and profitable Global Convenience Market % Profitability (US$bn) +5.1% 6% CAGR 531 394 3% 3% 1% 2020 2026 Online revenue pool of $50-75B (convenience only) to $600B+ (including all grocery) Hypermarkets Discount Supermarkets Convenience So
Slide 8: Online quick commerce has clear product market fit
Online quick commerce has clear product market fit Consumer Retention NPS Quick Food Ecommerce Ride Travel Commerce Delivery Sharing 40% 70 66 64 30% 20% 20% 19% 17% 10% 8% 3% 0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Months iFood Food Delivery iFood 3P Groceries iFood Convenience Source: Seco
Slide 9: Online quick commerce customers are already on food delivery platforms
Online quick commerce customers are already on food delivery platforms Gopuff USA app users also use ... 88% 77% • Limited CAC 60% • Cross-selling 44% • Opportunity to implement enhanced loyalty programs DoorDash Uber Eats GrubHub Instacart Data.ai Android cross usage analysis for December 2021 – Fe
Slide 10: Quick commerce is easier to execute from an operations and logistics perspective than 1P food delivery
Quick commerce is easier to execute from an operations and logistics perspective than 1P food delivery 3P Food Delivery 1P Food Delivery Quick Commerce Pizza Sushi Pizza Dark Store Taco 9
Slide 11: Illustrative store-level profitability with scale
Illustrative store-level profitability with scale Contribution margin after fulfillment, delivery and hub costs 20% 0% -20% % Contribution Margin -40% Store -60% breakeven post 400-500 orders -80% per day -100% -120% -140% -160% 0 100 200 300 400 500 600 700 Hub Orders Per Day 10
Slide 12: Path to profitability: many levers to drive gross margin
Path to profitability: many levers to drive gross margin Delivery Fees Store / Increase AOV Decrease COGS / Advertising Warehouse Delivery • Optimize and • Sourcing • Optimize delivery • Store efficiency is a • Delivery drop rates localize selection relationships with fees and institute function of
Slide 13: We are building the largest quick commerce footprint
We are building the largest quick commerce footprint Dark Stores 2021 1074 900 687 603 211 155 109 123 51 64 19 21 34 0 5 12 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2021 Q2 2021 Q3 2021 Q4 2021 12
Slide 14: iFood Quick Commerce
CONFIDENTIAL iFOOD QUICK COMMERCE MARCH 30th, 2022 The information in this document is confidential to the person to whom it is addressed and should not be disclosed to any other person. It may not be reproduced in whole, or in part, nor may any of the information contained herein be disclosed witho
Slide 15: iFood is the most loved delivery company in Brazil
iFOOD IS THE MOST LOVED DELIVERY COMPANY IN BRAZIL KEY HIGHLIGHTS AN INTEGRAL PART OF A BRAZILIAN’S DAILY LIFE iFood brand is recognized by 74% of Brazil Total Orders (Millions) 107% 3 Year CAGR 553 iFood Drones in São Paulo skyline, iFood in Copacabana beach Investing heavily in ESG 276 141 68 FY18
Slide 16: Fast growing grocery marketplace serving around 1,200 cities
FAST GROWING GROCERY MARKETPLACE SERVING AROUND 1,200 CITIES ASSET-LIGHT BUSINESS MODEL GMV GROCERIES BRAZILLIAN GROCERY SECTOR IS (BRL Millions) c. BRL 600B TAM1 • A new channel for FMCG to reach consumers GMV 2020 - TOP 5 PLAYERS (R$ B) 1 CARREFOUR 74,8 NEW 2 ASSAÍ (EX-GPA) 39,4 1 3 GPA 31,1 • Par
Slide 17: iFood started to invest in quick commerce in mid 2021
IFOOD STARTED TO INVEST IN QUICK COMMERCE IN MID 2021 • Started to scale in July, pursuing <15-min delivery • iFood customer base / data determines optimal location for stores • Targeted product assortment STORES (#) 60 62 51 35 19 25 15 5 6 MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB 2021 2022 Source:
Slide 18: Despite being a late entrant, iFood has shown rapid growth
DESPITE BEING A LATE ENTRANT, IFOOD HAS SHOWN RAPID GROWTH QUICK COMMERCE – GMV NUMBER OF CITIES IFOOD QUICK COMMERCE COMPETITOR 1 COMPETITOR 2 COMPETITOR 3 COMPETITOR 4 QUICK COMMERCE GROCERIES MARKETPLACE FOOD DELIVERY 1P FOOD DELIVERY (TOTAL) 2 000 1,750 1 500 1 000 1,209 500 465 20 0 40% FEB/22
Slide 19: Quick commerce drives retention and frequency
QUICK COMMERCE DRIVES RETENTION AND FREQUENCY QUICK COMMERCE IMPROVES QUICK COMMERCE DRIVES FREQUENCY RETENTION 1 AVERAGE COHORT RETENTION (%) 2 OVERALL iFOOD FREQUENCY (Transactions per month) 100 10.1 9.8 9.8 9.7 9.4 9.6 87.7 85.3 83.7 82.4 81.1 61.7 58.1 56.0 54.1 52.9 5.4 5.2 5.0 5.0 5.0 5.0 M-0
Slide 20: In a short time we are delivering an excellent customer experience
IN A SHORT TIME WE ARE DELIVERING AN EXCELENT CUSTOMER EXPERIENCE AVERAGE DELIVERY TIME (MIN) BREAKAGE (%) NPS (#) 15 2.5 70 10.5 1.6 15 jul/21 feb/22 jul/21 feb/22 jul/21 feb/22 Note: KPIs from largest most mature QC stores (Pinheiros and Pompéia). Source: iFood analysis 19
Slide 21: We see a path to solid unit economics and profitability
WE SEE A PATH TO SOLID UNIT ECONOMICS AND PROFITABILITY QUICK COMMERCE 2021 AT SCALE ORDERS/ DAY/STORE 225 600 c. R$ 70 c. R$ 90 AOV DELIVERY FEE - c. R$ 8-10 1.3% 3.0%+ GMV ANNUAL ADS GMV Source: iFood analysis 20
Slide 22: A promising road ahead
A PROMISING ROAD AHEAD TODAY 2022 2023 • ~70 dark stores • Use iFood customer data • Scale number of stores operational and demand to position stores and scale sales • Drive profitability in the • Growing 10x consumer basket – category in 7 months • Continue to improve expansion, pricing, sourcing e
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